SEBI Issues Guidelines For Business Continuity Plan For Market Infrastructure Entities

The Securities and Exchange Board of India on Tuesday came out with guidelines for a business continuity plan and maintaining a disaster recovery site for market infrastructure institutions, including clearing corporations.

In June 2012, the regulator prescribed framework for the business continuity plan and disaster recovery site for stock exchanges and depositories. “With the advancement in technology and improved automation of processes in terms of transitioning time, wherein the operations can be moved from the Primary Data Centre to the disaster recovery site, it was felt that the extant framework needs to be re-examined,” SEBI said in a circular.

Now, the framework has been revised and would also be applicable for clearing corporations. “The stock exchanges, clearing corporations and depositories (collectively referred as market infrastructure institutions) should have in place business continuity plan and disaster recovery site so as to maintain data and transaction integrity,” the circular said.

To ensure zero data loss, stock exchanges and clearing corporations are required to have a near site in addition to disaster recovery site. The depositories should have to adopt a suitable mechanism. According to SEBI, the disaster recovery site should preferably be set up in different seismic zones and there should be a minimum distance of 500 kilometres between it and the disaster recovery site so that both the systems are not affected by the same disaster.

Additionally, the institutions are required to have recovery time objective and recovery point objective of not more than 4 hours and 30 minutes, respectively.

Also, updates updates made at the Primary Data Centre should be reflected at disaster recovery site or near site immediately.

Disaster recovery drills should be conducted on a quarterly basis and include running all operations from disaster recovery site for at least one full trading day without any operational support from the staff based at Primary Data Centre, the circular said.

Live trading sessions from disaster recovery site should be scheduled for at least two consecutive days in every six months on normal working days.

“The results and observations of these drills should be documented and placed before the governing board of stock exchanges/clearing corporations/depositories. Subsequently, the same along with the comments of the governing board should be forwarded to SEBI within a month of the disaster recovery drill,” the circular said.

The regulator has asked the institutions to define 'disaster' depending upon their line of business. “Stock exchanges, clearing corporations and depositories are advised to submit their revised BCPDR (Disaster Recovery) policy to SEBI within three months.”